Existing home sales rise to a 9-year high

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Existing home sales rose 1.8% at a seasonally adjusted annual rate of 5.53 million, according to the National Association of Realtors.

The rate was the highest since February 2007.

Meanwhile, the median price of an existing home rose 4.7% year-on-year in May to a new peak of $239,700.

This happened as inventory fell compared to the same time a year ago. Properties stayed on the market for 32 days in May — the shortest time since the NAR started counting in May 2011.

The combination of tight inventory and strong demand has raised prices and made lower-priced homes further out of reach for some buyers.

Economists had forecast that sales of existing condos, co-ops and single-family homes rose 1.8% at a rate of 5.55 million, according to Bloomberg.

"This spring's sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they've accumulated in recent years and finally deciding to trade-up or downsize," said Lawrence Yun, NAR chief economist.

"With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now."

Pending home sales have been strong in the last few months, implying an increase in closed contracts, noted Bank of America Merrill Lynch analysts ahead of the data.